- Project Helvetia shows the feasibility of two proofs of concept (PoCs), using “near-live” systems to settle digital assets on a distributed ledger with central bank money.
- A PoC linking the existing payment system to a distributed ledger and another issuing a wholesale central bank digital currency (CBDC) are compared.
- The collaboration sets the stage for further joint experimentation to assess the impact of digital innovation on the future of the financial system.
The Bank for International Settlements’ Innovation Hub (BISIH) Swiss Centre, the Swiss National Bank (SNB) and the financial infrastructure operator SIX today announced the successful completion of a joint proof-of-concept experiment that integrates tokenised digital assets and central bank money.
Project Helvetia explored the technological and legal feasibility of transferring digital assets through:
- issuing a wholesale CBDC onto a distributed digital asset platform; and
- linking the digital asset platform to the existing wholesale payment system.
The initiative demonstrated the feasibility and legal robustness of both alternatives in a near-live setup.
However, comparing them reveals benefits and challenges. A wholesale CBDC has potential advantages when settling digital assets. Yet it would raise major policy and governance hurdles. Linking existing systems to new DLT platforms would avoid many of these problems, but would forgo the potential benefits of full integration. Project Helvetia explored a wholesale CBDC, restricted to banks and other financial institutions. A retail or general purpose CBDC would address different use cases and have very different policy implications.
The proofs of concept are experiments conducted at the BISIH and should not be interpreted as an indication that the SNB is to issue wholesale CBDCs onto SIX Digital Exchange’s (SDX) platform or to allow settlement of SDX transactions in the Swiss Interbank Clearing system.
Read more: https://www.bis.org/press/p201203.htm
